ECONOMY

In Brief

Argentina says Greece may be set for recovery Greece’s economy may be poised for recovery after a rescue plan was agreed on by the euro region and the International Monetary Fund, Argentine Economy Minister Amado Boudou said. «The good news is that we have a package, the volatility of the international markets is lower and maybe it’s the starting point for a recovery of the economy,» Boudou told Bloomberg Television in an interview yesterday. Greece reached an agreement on the terms of a three-year package of 110 billion euros ($145 billion) in loans after pledging to push through budget cuts worth 13 percent of gross domestic product. Argentina defaulted in 2001 on $95 billion in debt after the expansion of its economy, South America’s second largest, spurred demand for the country’s government bonds. «The main issue is outside the package,» Boudou said. «The Argentinean lesson is that it’s very important to catch the opportunity to improve the whole system, mostly the real economy.» (Bloomberg) Central banker: Spain should take crisis notes MADRID (AFP) – Spain should learn from Greece’s fiscal crisis and take adequate measures to reduce its public deficit, Bank of Spain Governor Miguel Angel Fernandez Ordonez said yesterday. «Spain should draw lessons from the Greek case and do what we have to do,» he told reporters a day after European nations endorsed an unprecedented 110-billion-euro (146-billion-dollar) bailout to save Greece from bankruptcy and shore up the euro single currency. «I hear many comments about how we have to act promptly but it is important to take measures that, moreover, are sufficient, because otherwise on the following day we will once again face the same problem,» he added. Investors worry that Greece’s debt debacle could spread to other heavily indebted eurozone nations under financial pressure, including Spain, but Ordonez said the situation in Spain «was far, very far from that in Greece.» «Many countries would like to have Spain’s debt,» he added. While Greece’s public deficit was equal to 13.6 percent of its gross domestic product last year, in Spain it was 11.2 percent. Greece’s debt-to-GDP ratio is 115.1 percent, compared to just 53.2 percent in Spain. Portugal relief The international bailout for Greece will ease pressure on Portugal but Lisbon needs to press on with austerity measures to keep fears of contagion at bay, Portuguese newspapers said yesterday. «It is good news for Portugal,» the financial daily Diario Economico said, commenting on a 110-billion-euro rescue package agreed to by the eurozone and International Monetary Fund on Sunday to keep Greece from defaulting on its massive debt. «With the solution for Greece, we have gained some time,» the newspaper said in an editorial warning that «there is no reason to be partying.» It continued, «It only gives time to take a good breath and put in place the measures needed to solve the Portuguese problem.» The Diario Economico warned that «if nothing is done, the Portuguese people will have to pay a bill similar» to the Greeks, who face draconian spending cuts, a tax hike and a higher retirement age. Portugal’s borrowing costs have risen in recent weeks and the country’s debt rating was cut amid fears that the Greek debt crisis could spread to other eurozone economies with high public deficits. (AFP) SEV: Wrong message The Hellenic Federation of Enterprises, the country’s largest employer group, said plans by the government to impose a second extraordinary tax on companies to raise 600 million euros next year was sending «the wrong message at the wrong time.» The federation, known locally as SEV, said in an e-mailed statement yesterday that the package of austerity measures announced by the government yesterday in return for emergency loans provided the country «still in the shadow of bankruptcy, with a grace period.» Effective implementation could reform the public sector and usher in structural reforms that will create growth, Athens-based SEV said. Imposing the special levy for a second year could hurt growth, the organization said. (Bloomberg)